Crypto sags lower on risk off sentiment

This Daily Digest will cover:

• Holidays are over
• FED minutes show cracks
• Crypto sags lower on risk off sentiment

Apologies for the lack of morning reports over the holiday season. My time dodging wildfires is over now and it is back to the markets!

Risk is off at the moment with stocks lower, USD higher and Crypto sagging through recent support. The backdrop to this is yields pushing higher with the US 10 year breaking through 4.25 and the 2 year nudging 5%. Last night splits on the FOMC were laid bare as some see more rate hikes, others warning of the dangers of over tightening. What was missing was any sign of cutting, hence the narrative is higher for longer. To be honest we have been here before and broadly I feel we are close, if not at , the nadir for rates. I believe these moves are getting exaggerated by summer liquidity and as we head into September the bigger picture of no recession, inflation cooling and rates peaking will see a decent bounce back across the board.
For now the tone is set and until we see stocks catch a bid(likely led by China) I am holding off on buying dips.

Crypto has been as quiet as a church mouse doing a sponsored silence, but sadly has woken up to the downside. This is hardly surprising with the general risk backdrop, the SEC appealing the Ripple decision and the general malaise of lazy long positions. It has to be said the move lower is orderly and, thus far, not that large. BTC at 28,500 ETH 1995 and XRP at 0.5870 are all hovering just below their recent supports and I find myself a little surprised we have not pushed lower. Whilst buying the dip would be reckless to call at these levels I will be quick to jump back onboard should 29,100, 1820 and 0.6050 be regained respectively.

Good luck as always

Rich

Richard Usher
Head of OTC Trading